Ecom Growth Insider · Podcast episode

Brand Licensing: Rent A Fanbase, Not More Clicks

With David Born · Published 2026-10-06 · 47 minutes · Hosted by Andrej Tumachowitsch

Brand Licensing: Rent A Fanbase, Not More Clicks

David Born has worked in licensing for about twenty years. He was inside Warner Bros. Consumer Products and at Cartoon Network, on the side of the table that decides which brands get a license, and for the last twelve years he has run his own licensing agency. A growing share of that work is now ecommerce brands.

His argument is that every brand is bidding for the same attention on the same two platforms, and there is a second way in that almost nobody in DTC uses: borrow a fanbase somebody else spent decades building, put it on the product, and pay for it out of sales. The catch is that it costs real money before a unit sells, takes about a year, and does nothing for a brand that is already struggling.

This is for operators who have a product people already buy and want a lever that is not another ad. You get what a first license costs line by line, how the minimum guarantee is set from your own forecast, why the hottest IP in the world is the wrong first deal, the ten-working-day approval clock that resets every time you change something, and what a license does to the company on the day it is sold.

What you will take away

• Two numbers define every deal. A minimum guarantee, owed whether or not a single unit sells, and a royalty on sales, reported quarterly, that offsets the guarantee. Meet the guarantee in royalties and you overperformed. Miss it and you pay it anyway.
• The guarantee is set from your own forecast. The licensor applies the royalty rate, around 10 percent on average for an ecommerce brand in David's experience, to the sales you forecast for the term. His worked example: $10 million of forecast sales at 10 percent is more or less a $200,000 guarantee, paid in portions over the term.
• Do not overstate the forecast, and do not lowball it. Promise $150 million and the guarantee will reflect it. Promise $50,000 hoping for a $5,000 guarantee and no licensor will draft the deal. Benchmark on whatever you have already done that is closest to this launch.
• The hottest IP is the wrong first license. The biggest studios are stretched thin and selective, and will send a brand with no track record away to prove itself first. Start with a licensor that is open for business and a fanbase that is strong but not in peak demand. He will not name which ones, because it changes year to year.
• Plan on a year, and on a clock that resets. About three months to negotiate and sign, then up to nine months of product development. Every concept, sample and marketing asset goes into an approval queue that takes ten working days, and every change starts the ten days again. His team holds a marketing kickoff two months before launch so every scenario is approved before it is needed.
• Licensing scales a good brand and sinks a struggling one. Strong cash flow, an existing customer base and factories you trust come first. Without them a license adds a stakeholder, overheads and processes, and it makes things worse. His anchor case, a loose leaf tea brand ten years in before its first license, is told with the founder's own numbers, which the transcript flags as unverified.
• Read the contract before you ever sell the company. A license can make the company more valuable to a buyer, but the licensor usually keeps the option not to continue after a sale, and some contracts carry a fee owed to the licensor when the company changes hands.

Jump to a chapter

• 00:00 - Intro and what licensing actually covers
• 03:45 - What a first license actually costs
• 04:38 - Minimum guarantee and royalty, defined
• 05:37 - The worked example on a Hello Kitty deal
• 08:32 - Building a forecast a licensor will accept
• 10:52 - Never make the hottest IP the first one
• 12:45 - Who says yes to a brand with no track record
• 16:10 - The Paramount and Warner Bros. merger
• 18:49 - Twelve months from first email to first sale
• 19:56 - The 10-day approval clock that resets
• 23:55 - Inside Warner Bros., reading the pitches
• 26:38 - What has to be true before a license helps
• 27:17 - Licensing does not save a struggling brand
• 28:06 - A ten-year-old tea brand's first license
• 30:15 - The second collection and the basket effect
• 34:43 - Cash flow, margin and absorbing the royalty
• 36:09 - Marketing approvals and the 10-day queue
• 40:02 - The most expensive mistake he has seen
• 41:00 - What a license does to a sale of the company
• 42:22 - Overrated or underrated, five calls
• 45:29 - The first move for an operator next week

Full transcript

Lightly edited from the episode captions for readability. The episode is the record - where they differ, the audio wins. The cold open and the host's introduction are not reproduced here.

00:00 - Intro and what licensing actually covers

Andrej: David, welcome.

David: Thank you. Thanks, Andrej, for having me.

Andrej: Quick intro for the people who don't know you, like what are you actually doing right now?

David: Yeah, so I'm David Born. I am a licensing expert. I've been in the licensing world for about 20 years now. I've worked at Warner Bros. Consumer Products. I've worked at Cartoon Network. And I've had my own licensing agency for the last 12 years. Really starting working with advertising agencies that wanted to license IP for their campaigns. Think SpongeBob in a Super Bowl commercial, for example. So we we did that for for quite a while. And now in addition to that, we've started a new era of our business where we're doing a lot of work with e-commerce brands, which I'm sure will come up at some point during

Andrej: our chat. Yeah, yeah. And let's start like really really basic. I think most people listening to this have never done that. Like when a brand puts a big character or like a famous name on their product, like what are they actually buying? And like what does a deal like that look like?

David: Yeah. So the first thing I should say is that often when people think of licensing, they think the obvious. They think walking into a Walmart store and seeing Mickey Mouse on a T-shirt and hey, you know that. That's licensing, but actually the scope of licensing is so much bigger. You know, Disney falls into the entertainment space, and that's certainly the highest profile way to license something. That's certainly the one that people know most. But actually, you can license a corporate brand. You know, we did a really great partnership with Every Man Jack earlier this year with John Deere, for example, an industrial brand. You can also license celebrities. You can. license food brands you can license sports brands or musicians brands so when we talk about licensing it is it is the entire scope of licensing borrowing somebody's IP and borrowing borrowing their goodwill borrowing their fan base and placing that on your product whether it is apparel you know a t-shirt company it could be a Food company, it it could be toys, it could be stationery, anything across the consumer products space. That's essentially what licensing is, borrowing someone else's IP to place on your product to with with a goal of increasing sales.

Andrej: I think one of the the first questions that like an an operator or like a founder that I would present that That idea too, like one of the first questions that they would have is what does it cost? And let's say a brand does like a few hundred thousands a month or like a few million a year in terms of revenue. Have never done something like that. Like what would it cost for something like that? And at what stage of the business does it begin to make sense?

03:45 - What a first license actually costs

David: You know it's funny Andrej because I get contacted sometimes 10 times a day from companies that kind of need help with licensing and when I jump on a call with them The first question they ask is, "How much does it cost?" and the answer is is relatively long. So let me dive into the detail because it's not kind of like, "Oh, it's definitely going to cost this much." I usually have to ask a lot of questions because it depends on your category, your market, your sales projections, your the license that you want to sign. Who owns that license? But the general rule of thumb is that there are two things in the licensing agreement that everybody needs to be mindful of. The first is something that's called the minimum guarantee. The second is the royalty. So the minimum guarantee is what is an amount is a fee that you're going to agree to pay the licensor regardless of how much the product that you sell. Even if you sell zero product, if something doesn't go to plan, you end up not selling the product whatsoever. You're still on the hook for this minimum guarantee. Now the royalty. The royalty is the percentage of sales that you'll be paying to the licensor. The licensor is the company that you're licensing the IP from. Now, the royalty rate, you'll be reporting royalties on a quarterly basis, and that will offset the minimum guarantee that's been agreed. Let's go back to the minimum guarantee because you're probably wondering, like, how how do we even agree on a fee? What is that minimum guarantee? Going to be. Well, that most of the time it depends on sales forecasts. So let's say, for example, a T-shirt company wants to get a Hello Kitty license. They go to the Hello Kitty team. What they'll need to do in order to determine what the minimum guarantee is going to be is provide sales projections. If you had a Hello Kitty license for your T-shirt brand for say a two-year period, what would your sales be? And they'll look at at your sales forecast and they'll apply the royalty rate to that and then that will get them to the minimum guarantee. Now, royalty rate will typically be for an e-commerce brand. It's on average around 10%. So let's say, let's use a you know, an example of a T-shirt company wants a Hello Kitty license. They think that they'll do 10 million dollars of sales within the first two years of Hello Kitty branded product. With a 10% royalty applied to that, we're looking at you know more or less $200,000 as a minimum guarantee. That is essentially what you're on the hook for to pay for the Hello Kitty license regardless of how much that you sell. Now it's not all going to be due on signature. Usually there's a portion that's due on signature of the license, and then perhaps in another six months there's another scheduled payment. And then the remaining balance of the minimum guarantee will be paid over the course of the term. So that gives you a relatively good sense of how a licensing deal is structured. And hopefully I haven't complicated matters, but there is there is really no simple answer. It really comes down to a lot of different variables.

04:38 - Minimum guarantee and royalty, defined

05:37 - The worked example on a Hello Kitty deal

Andrej: Okay, yeah, I think I think it all makes sense. So there is the the minimum guarantee that you Commit to and then the royalty that gets like if the royalty exceeds the minimum guarantee you only have to pay the royalty right and if it's below that you still have to pay the the

David: minimum guarantee yes exactly so every every quarter you'll be reporting royalties and those royalties will offset the minimum guarantee and once you overperform once you sell more than you said that you would then you're still paying but you're paying on the overages But you're right. If you don't reach the minimum guarantee, you're still paying the minimum guarantee. So that really is kind of like the benchmark of of success for a lot of licensing agreements. If you meet the minimum guarantee and exceed it in royalties, then that means that you've kind of overperformed. If you don't reach that minimum guarantee, then really you've underperformed as to kind of what everybody was expecting.

Andrej: I assume it's quite tough to to come up with those with those forecasts. I mean even in general like e-commerce it's very very difficult to have accurate forecasts. But then if you consider it's like you you test something new, you test like a product line or like a a brand that you've never worked with before or partnered up with before. Like how do you make sure that those forecasts are are accurate or how do you create them?

08:32 - Building a forecast a licensor will accept

David: Yeah, I think that what you what everybody needs to think about is what a typical, what have you done that is as close as possible as what you want to do with this particular license. So, for example, if you usually do, you know, four four drops a year, and that's what you're planning on doing with this particular license, use that as kind of like a benchmark. But what I would say is. When you're putting together a proposal for a licensor and you're sharing your forecast, there's two things that you should not do. The first is over-exaggerate the potential. Often, a lot of our clients come to us and they say, "Wow, if this really takes off, we're going to make 150 million dollars of sales in the first three years." We have to say, "Whoa, whoa, whoa, do not take that to the licensor because they will put you on the hook for a minimum guarantee that that reflects that." And so, but then on the other side, others come to us and they know how a minimum guarantee is calculated and they want to they want as low risk as possible. So they'll say, "Oh, we think we'll do like fifty thousand dollars of sales and hope that they'll get a minimum guarantee of like 5k." But that's not going to work either because what licensor cares about a minimum guarantee of 5k? They all licensors are under resourced. They're not going to get out of bed for 5k. Like so, it needs to have a real sweet spot. It needs to be enough appealing enough of a financial offer for the licensor to say yes we're going to draft the licensing agreement we're going to release our assets we're going to go through the product development phase we're going to service this licensee and it's worth it but it it can't be too much so that the that you know you're essentially on the hook for a massive massive

Andrej: minimum guarantee that's just going to stifle cash flow Yeah, you have to to find the perfect balance where it's still interesting, for for the company and also yeah where you don't overexaggerate your the potential where you end up having to pay way more.

David: Exactly, exactly. And you know I would always encourage we always encourage our clients like don't go for the most expensive license to begin with. You know it's it's actually really important for your first license to do really really well and for it to make sense commercially. Everybody wants to work with Disney or everybody wants to work with Bluey or Hello Kitty or or you know KPop Demon Hunters or or whatever the hottest IP is right now, but don't make that your first license because licensing is something that it's it's highly risky and licensing is something that just takes a lot of getting used to. Even our clients, where they have our guidance, takes a it takes them a while to get into into a rhythm. The other thing is that you probably won't get a Disney license for your first license anyway. You're kicking down that door. You know, if if you haven't proven that you can respect IP and that you can launch great licensed products, the Disneys of the world are are going to probably say, "Go and launch some other licensed product and come back to us when when you have kind of." Proof of concept that licensing works for you. That's that's actually a really important component. There is a handful of licensors that we work with, where we know they're really open to business. They're open to working with new innovative companies and and that their business model and the way that they're working leans well into e-commerce. And then there's some licensors where they are they're more traditional. They're focused a lot on physical retail. They want to do less deals with bigger companies, the 80-20 rule, because they have resource challenges and they can be more selective because they've got really hot IP. So I think finding the right licensor for your first license is absolutely critical for your long-term licensing success.

10:52 - Never make the hottest IP the first one

12:45 - Who says yes to a brand with no track record

Andrej: So who does who does say yes to a brand that has like never done that before? Like do you have any specific names or examples?

David: I probably wouldn't want to go into like specific as to who says yes because it it doesn't it it often changes, right? A particular licensor this year might have really high targets and they might be coming to us and saying, "Hey, we want we want new clients. We're open to new business." And then they might have a restructure or things might change and next year they might they might be much more conservative, much more selective. So I wouldn't want to. say specifically only because it might not not date well but you know the typical rule of thumb is that that the bigger licensors kind of like the big studios and the properties that are kind of like the hottest properties in the world right now are often on the more selective side and those that are kind of in in less demand but still have a kind of like a a strong customer base fan base you know those ones Are typically more open for business.

Andrej: And why would you say why are the big ones so selective? Is it more because they're afraid, like because of the financial opportunity not being big enough for them to to even care, or is it more about the the risk of the brand being exposed to like a a product maybe that is not not aligned with with them.

David: I think it's all I think it's all of that all that you mentioned Andrej. I would say also that the big brands they are struggling with resource. The licensing industry is is under you know a bit of strain at the moment from a resource standpoint. Every licensor that I know is stretched extremely thin, and so legal teams are struggling to get licensing agreements out within a reasonable amount of time. Product development. Teams are working their butts off, but you know there's they've they've got thousands of approvals in their inbox that they need to manage. You know you've got accounts teams and deal makers that have these really really insane targets that they need that they need to meet that is preventing them from doing business with smaller companies and focusing on how can they do more with the bigger companies. And and and also because often a lot of them Are in high demand and so they can actually be more selective. They can say, "Okay, if we're gonna if we're gonna have 250 clients, you know, on our on our roster, you know, we we're gonna select the 250 or the 100 or the 50 clients that are kind of like the best. You know, we're gonna work with Lego. We're gonna work with Mattel and Hasbro and kind of like we're gonna work with the big toy companies. We're gonna work with." Retailers direct. We're going to do business with Walmart directly. You know that that those are the decisions that a lot of the licensors are making right now. Is that how can we do more with less?

Andrej: When you say like the the the resources for a lot of licensors are are missing, is it just like manpower? Do they not have enough people on the team to just like there's more demand that they can that they can supply than they can supply.

16:10 - The Paramount and Warner Bros. merger

David: Yeah, I mean, there's a lot of consolidation that's happened in the entertainment world over the last decade and continues to happen. You know, this Paramount and Warner Bros. merger is looming over us, expected to happen early next year. My expectation is that that it will happen, and you know that is two major forces in entertainment combining to one. You know, and David Ellison has said expecting six billion dollars of efficiencies. Well, what does efficiencies mean? Efficiencies mean redundancies, right? So I'm actually very concerned for my colleagues, you know, those that are working at Paramount, those that are working at Warner Bros. Discovery, because when they merge, there will be redundancies, and they both have massive portfolios on the Paramount side. You know, SpongeBob, Yellowstone, Paw Patrol on Warner Bros. have got Looney Tunes, DC Superheroes, Scooby-Doo, Tom and Jerry, Harry Potter. You know, at the moment, you know, those those properties are being serviced, but when they are combined, they will probably let people go, and the same amount of people are going to be expected to manage this enormous portfolio. That is really happening across the board. There is a lot of consolidation happening, and the licensing teams, the licensing divisions, don't get enough credit. They don't get. you know the resource that they that they need or the focus because there's always something bigger going on so all the big studios are focused on box office you know how how is box office going driving people to cinemas you know how can we get the next billion dollar film or they're focused on on their streaming platform you know whether it's Netflix Disney+ Paramount+ HBO Max you know they are focused that is such an important revenue stream for them that has to work And then consumer products, my argument is, it actually supports all of those areas of the businesses. It supports theatrical releases. You know, when you're walking down an aisle of Walmart and you see, you know, Paw Patrol product and you're reminded that the new Paw Patrol film is in cinema, you know, consumer products plays a very important role of driving people to cinema or driving people to streaming, but. Unfortunately, I feel the licensors and the studios are really focused on those getting those right, and licensing has has just always been, you know, a lower tier priority. Unfortunately.

Editor's note: on tape the surname is pronounced 'Allison'. The Paramount chief executive who announced the figure is David Ellison, and the captions carry the correction.

Andrej: And what would you say, like when a brand wants to to do such a such a deal, like how long does it usually take from like the the first email until they're able to sell the products?

18:49 - Twelve months from first email to first sale

David: Yeah, that's a great question. We we we always give our clients a guideline of about 12 months. So I would say that the first three months of that is negotiating the deal, having the license drafted, and signing the license. After that point, you'll get assets released to you, and then you have to start the product development process. So what does the product development process look like? Well, this is one of the most crucial Responsibilities that a licensee has, because that product that they bring to market has to be exactly as the licensor, needs it to be. On brand, look with with the color palettes perfect. If it's a molded product, it needs to look exactly like that character. And so, after they release assets, you'll be responsible for putting together concept designs, saying. This is how we see the IP being applied to my product, whatever the product is. And then you'll need to submit it. They'll take 10 working days to review and provide feedback. And their feedback, usually in the initial concept, they'll want changes. So they'll come back and say, "Look, we're not, we don't think the IP has been applied right, or this pose is is not approved, or please add the logo here, move this here, move this here." Then you need to make that change and resubmit it, and then the 10 days starts again, and so you can see how this all adds up. Once you get through the concept stage, they need to see pre-production samples, so they'll want to want to see samples of how is it actually going to look. You either have to send that to them, or you can take really great, clear photos so they can really understand that it's looking it's looking great as expected. Once that's approved, again, if there's any changes. Make the changes, the 10 days resets, resubmit, and then once that's approved, then you have then you can go to production, but you need to provide them with final production samples as well. That process can sometimes take nine months. So when we're saying three months of the contract process, nine months for product development, from the moment you speak with the licensor, providing everything goes well, to when you can actually offer your licensed range for sale, is about a year.

19:56 - The 10-day approval clock that resets

Andrej: Do you have like any benchmarks on like how many revision rounds it usually takes? I guess it it varies a lot based on the the licensor and also the the brand.

David: Yeah, there's there's a lot of factors that go into that. One is how particular is the licensor? Two, how good is the licensee? Like how good is their creative team? How well can they sort of understand instructions and how willing are they to make the changes? You know that. That's a big part of it as well. Sometimes the licensor will come back and say, "We'd prefer you to make this change, this change, this change." And the licensee is like, "Well, no, we're really, we're really adamant that it needs to be this way." And there can be a bit of a push-pull that goes on, and that really eats up time as well. So it it depends on on a lot of those kinds of things. Every product development journey is wildly different, and you know that's why we we have a product development team of three people that. All day long they're living and breathing product development for our clients because it's such a seriously important part of the licensing process.

Andrej: Yeah, I think I think Davie Fogarty mentioned that that before, but also like for a lot of brands like that have no experience with with licensing at all, it could make sense to like rather than Try to get a licensor right away, reach out to other brands like similar size, similar like product industry potentially, and do like a partnership with them and try something similar with them. Do you have like any experience with that? And also, if then they wanna work with a with a licensor, do they take that as like credibility, as like a track record, or is that not really not really relevant?

David: Yeah, I mean, if we're talking about a collaboration where there's no kind of like license fee exchanged, where it's perhaps you know something where you know they benefit and you benefit and and you know it's not a licensing arrangement, it's kind of like a collab. Absolutely, I mean that's something we we don't do that. We we're purely focused on licensing, but I know a lot of brands kind of do that as dipping their toe into what licensing could be like. And absolutely, it adds credibility. You can go to a licensor and say, "Look, we haven't done licensing before, but we've done this collab. So this just shows that we we can respect, you know, third-party IP, and you know, we we we've done this before." And so, yeah, absolutely, I think licensors would see that and give them kind of like extra points, for for something like that.

23:55 - Inside Warner Bros., reading the pitches

Andrej: You've been you've been on the other side of the table as well. Like you sat at at Warner Bros., like reading those those pitches. What was that actually like and like what what landed on your desk?

David: Yeah, so I was so lucky. My role was Manager of FMCG and Promotions, so fast-moving consumer goods and promotions. So promotions was anything from you know Happy Meals. I did Looney Tunes Happy Meal, for example, with the toys. Or it could have been, you know, I think around the time it was the the new Superman, not the new new Superman, probably two or three Supermans ago. But I was working on that film when we did a big promotion with Schick Razor Blades that was across across Asia Pacific. So those kinds of things. What I will say is working for Warner Bros. is certainly much different than working for David Born, working for me and Born Licensing. One of the reasons is because when you email someone or if you call and you're saying, you know, I'm from Warner Bros., people are more likely to return your call. People know that name. They see the email. Oh wow, David dot born at warnerbros dot com. Like wow, this is like cool. How glamorous. And so you're much more likely to get a meeting. You know, in my early days of having Born Licensing, it was much more challenging. People were like, who are you? People now are starting to to know who I am after 12 years. Thank goodness, but. You know, it's much easier to kind of reach out and ask for things when you're you're coming from someone like Warner Brothers. I would say that you know we we did have the situation where there was a lot of people that wanted to work with us, but you know we had to make a really smart assessment as to where we where we were going to get bang for our buck, so to speak, in terms of the time that we invested. So we we often had a lot of food companies, beverage companies coming to us saying that they wanted to license our IP, but I had to do the exact same assessment that I've kind of spoken to you about. What are their sales forecasts? Importantly, what's their distribution? Now, back when I was working at Warner Bros., e-commerce wasn't as much of a thing, and so I don't think I had any e-commerce clients at all. Actually, it was like 15 years ago, so it was very much retail. So my number one question I'd ask them is like. What what retail distribution do you have? And if they didn't have retail distribution, the question was really like, how how are you going to sell this? You know, you can't use the license to kind of get on shelves. You need to have distribution first, and license is very much complementary. And this is something that that leads me to, you know, what I would say to an e-commerce company or or any company really that wants to get into licensing. If you don't have your If you don't have a buttoned-up business, if you don't have strong cash flow, if you don't have an existing customer base, if you don't have really strong, if you're not confident in your manufacturing processes and your factories that you're working with, then licensing is is an absolute non-starter. Licensing makes great companies and great products even more great. But it can really be a burden if you if you are not running a great business. Licensing does not save companies. It does not save brands. It it makes things worse if you're if you're really struggling because there is an additional you know stakeholder involved with the process now, and you've got additional overheads. You've got additional processes. You'll have to hire people that understand licensing. So. You know, I I I would always encourage people to make sure that you're going after licensing for the right reasons.

26:38 - What has to be true before a license helps

27:17 - Licensing does not save a struggling brand

Andrej: Yeah, and I think you you mentioned you said yourself before that licensing should add fuel to the fire that is already burning. When would you say when is a brand ready for that? Like, do you have a specific threshold?

David: Yeah, I I. I wouldn't say there's like an exact number. I mean, let me talk about one of our clients, Plum Deluxe. So I had chat with Andy Hayes yesterday, who's the founder of Plum Deluxe. I spoke to him about my podcast. I've got a I've got a podcast episode coming up next month. It's all about e-commerce. And so Plum Deluxe, they sell these like really beautiful loose leaf tea collections. And last year they celebrated 10 years and they'd never done licensing before. but Christmas time they launched their first licensed collection with Peanuts so Snoopy in the game and I I was sort of like asking him you know why after 10 years did you did you want to do it and he said well you know first he's always kind of had his eye on licensing and he's he kind of like never got to the point where you know he he got there until he sort of like reached out to us but you know I think that e-commerce is is pretty tough out there and You know Andy and a lot of e-commerce companies are just looking for ways to bring freshness to their own customer base, but at the same time find ways to encourage new people to to to learn about their brand. You know and and suddenly he was able to tap into this brand Peanuts who has this generational fandom who has been that's been around for 75 years. That children love, grandparents love, and everybody in between love, and so he was able to kind of like tap into that fan base. And they sold out that Christmas collection sold out in 12 days, and it was much faster than they expected. And really importantly, he said he said that he spent less on ads than he normally would. And the Peanuts license did a lot of the heavy lifting for him. So think about it when people see a Peanuts product. One, they stop the scroll. Oh, I love Peanuts. You know, what is this kind of thing? And they're more likely to share it on social. They're more likely to, you know, send it to a friend or whatever. And you know, they're more likely to to click and try and discover more about it. He also recently launched a collection with Strawberry Shortcake and this one did even better. Had an even stronger effect. He called it the best performing. Meta ads that he's run since he started advertising on the platform in 2018, so he out it outperformed everything else in their in their catalog. So when when we talk about licensing IP, a lot of e-commerce founders and companies should be thinking beyond that particular range because what happened for Andy at at Plum Deluxe which was quite interesting was that Strawberry Shortcake and Peanuts were drawing people in, but they were putting other things in their basket at the same time. So they were buying the Peanut stuff, they were buying Strawberry Shortcake, but then they were buying other kind of non-licensed stuff as well. And then suddenly they were signing up for his newsletters, they were following him on social, and they are now plum deluxe customers. So it's like a really great strategy for customer acquisition as well.

Editor's note: the twelve-day sell-out, the lower ad spend and the 'best performing Meta ads since 2018' are the founder's own figures, Andy Hayes of Plum Deluxe, as David relays them. None of them is independently verified.

28:06 - A ten-year-old tea brand's first license

30:15 - The second collection and the basket effect

Andrej: Yeah, 100% agree. And it's funny that you mentioned that example, because I was working with with an e-commerce brand and also in retail, that had exactly the same thing happening to to them. They had like different corporation different licensing deals going, and they also had Peanuts in there. And when we were running, whether it was Google Ads, Meta Ads, like no matter where. The Peanuts collection was always the best performing one. It would get, as you mentioned, the highest click-through rates, highest engagement rates, most people to go to the site, like lower costs. And whenever we would run that, it would outperform everything else. And that was for a $3,000 like suitcase, that you would not just buy like like just from seeing one ad, but we were also seeing that way more people were subscribing to the emails. They were also buying other products. Like not that many people were buying those suitcases, but it would get generate like so many new people onto the onto the brand onto the site and they would buy other products and yeah exactly what you

David: mentioned. That's the thing about Peanuts, right? I mean we're going through a stage at the moment and I think it's been building and I don't think it's going anywhere where where nostalgia is having like a really really really big moment. Brands like Peanuts, brands like Care Bears, brands like Hello Kitty, Strawberry Shortcake, these are all brands that that we grew up with, you know, when we were younger in the 80s and 90s. And now, you know, our generation has disposable income, and you know we we like to go and buy stuff. And you know these are the kind of brands they have that you know that kind of generational awareness, those broad sweeping. fan bases, you know, it it's no surprise that it's that it's doing really well. I love Peanuts. My niece and nephew love Peanuts. My parents love Peanuts. So, you know, it's just it's just one of those brands that's immediately recognizable. I don't know if you saw, but Starbucks have just released

Andrej: a Peanuts collection oh wow.

David: That I am predicting. I predicted it. I put it on LinkedIn this morning. That it will probably sell out within 24 hours. It's a really beautiful range to kind of bring in fall. So there's a lot of poses of Snoopy with and Charlie Brown with like pumpkins and things like that. And yeah, it's it's gonna sell like crazy. It's it's so good to see a brand like that doing so well.

Andrej: Yeah, yeah.

David: Who doesn't love love Peanuts?

Andrej: Exactly. Where where would you say like where does this go go wrong? I mean, you mentioned an example of like where it went great, and where it improved sales, improved marketing. But what mistakes do you see the the most?

David: Yeah, a few watch outs. You know again I'll say licensing isn't for everybody. You know a lot of people would expect me to come up. My entire business is licensing, right? And you know everyone's like oh David you should you should really be selling licensing and you know I Licensing is not for everybody. You'll never see me say everybody should be doing licensing. You know, it it it needs to be a very thoughtful approach to licensing. Cash flow is really important. So we talked about the minimum guarantee. We talked about the royalty. So you need to make sure that you've got the right cash flow to service the minimum guarantee. You've got to make sure that you've got the the right margin to service the royalty rate. What I will say though is a lot of our clients are able to increase. their price to absorb the royalty that they need to pay to the licensor because consumers will typically pay a premium they'll usually pay more for a licensed product so that that's one way to to sort of work around the royalty in addition to cash flow the product development process I I mentioned it can be slow and patience is really really important particularly for your first one you know we we have a lot of E-commerce clients in particular that they're they're moving a million miles an hour. They they're dropping products on a you know collections on a regular basis and they kind of expect that they can get a license and then just and then just go for it. But it's a very structured process to get those products to market including things like factory checks and testing. So you know products need to be tested to make sure that they can. They can be sold in the market that you're selling. There's a lot of things that you need to consider to make sure that the licensor is comfortable with you selling product with their IP on them. Something also that particularly e-commerce brands struggle with is marketing approvals. You know, they every single marketing asset, whether it's a social media post, if it's going on the website, if it's going on your newsletter, if it's You know a press release or whatever, it needs to be approved. And the licensing industry is still pretty old school, admittedly. Everything gets submitted, it goes in a queue, and it gets approved in the order that it arrived in. And that's why it can sometimes take 10 working days. And so, e-commerce brands, they are used to being responsive. They wake up on the day, they see a trend, they record a video, they go live within a matter of hours, and then they see the sales kind of come through. You just can't. Do that with licensing because they just can't provide approval within a couple of hours, and so you know allowing sometimes 10 working days for approval is kind of what needs to happen on from our side on the Born to License side. If there's urgent things that need to be approved, we always do our very best to get them approved within a certain amount of time. But what we typically do with marketing approvals is we have a marketing kickoff two months before launch. So two months before launch, we get our client to start thinking, "What are you going to do about social media? And what are you going to do if your product sells out straight away? What are you going to do if your product doesn't sell through as expected? What are you going to do if the product is still out there in a month and you need to find new ways to sell the product? Let's prepare for every eventuality and get all those approved so that when you launch, all those scenarios are covered, and then you don't have to. feel like you need to, eh, that you can't respond to kind of what's happening in real time. And another thing to consider that's sort of linked to that is influencers. So a lot of e-commerce brands I know they're working with influencers. They send them the product, they do an unboxing, or they wear it, or they give it to their kids or whatever. Video it, send it over, and up it goes. With licensing, every single influencer needs to be approved as well. The reason for that is that licensors cannot have anyone partnering. With product that licenses licenses their IP, they have to be vetted. They have to be checked. We have to bear in mind all the time whenever you're working with a property when you're licensing IP, someone else's IP, it could be worth billions of dollars. Think about how much the Marvel universe is worth. Think about how much the Star Wars franchise is worth. These are billion, multi-billion dollar brands, and. They the the the licensors and the owners of that IP, they're not going to take any risks, and so they want to vet and make sure that every single influencer you work with is going to be approved as well. There's there's a lot to be considered if these processes that I'm talking about aren't palatable. If you don't feel like you have the patience for it, if you don't feel like you have the internal resource to do it, if you don't have somebody that can focus. 100% on licensing internally, you have two options. One, just accept that licensing probably isn't right for you right now, or two, hire an expert. And I'm not saying that just because I am one and this is the service that my company provides. There are other great people out there in the licensing world that also can support. I think that we have the best possible team. You know, we have a team of 16 people now at at Born and they're incredible, but there's a lot of great people out there. So if you're not sure, if you feel like you don't have the resource, if you feel like you need somebody to hold your hand, then you know reach out to a licensing expert and make sure that even just for the for your first licensing launch that you can have someone sort of guiding you

34:43 - Cash flow, margin and absorbing the royalty

36:09 - Marketing approvals and the 10-day queue

Andrej: through the process. What's the the most expensive mistake that you have seen actually happen?

40:02 - The most expensive mistake he has seen

David: Oh, I mean, thank goodness none of our clients have launched product that had to be recalled because they weren't approved. Like we are very, very careful about that, but that's something that can happen. So you know if if a company goes live with product and they actually manufacture, you know they they do a production run of a product that hasn't been approved for whatever reason, and that could be that the logos Not right, or the character is not in the right skin tone, or or you know the color palette's not right, or the legal line's in the wrong place, or or there's just something that is different to the final product that was approved. Then then they might have to destroy all of that product, and that can be extremely costly.

Andrej: Yeah, and let's say a brand with a license goes to to sell the company at at some point. Like that, does the license make the the brand worth more, or does the the buyer find out that it doesn't doesn't transfer?

41:00 - What a license does to a sale of the company

David: Yeah, I mean, I would say that yes, if you're doing licensing, a buyer could could see that to make your brand or your company more valuable, but at the same time, within the licensing agreement, typically, you can't In the event of a sale, you would, the the licensor would have the option to not continue, so they want to know who's buying the company. Sometimes they'll include language in the contract where you have to pay a fee, so you're selling your company and you have to pay the licensor a fee when you sell the company that's pre-agreed in the licensing agreement because they know. That by you having this portfolio of licenses, it makes your company more valuable. So I would say anybody that's doing licensing and is interested in selling the business, make sure you read, read, read your licensing contract so that you know exactly what your obligations are in the event of a sale.

Andrej: Okay, that makes sense. Now, as the as the last section, I want to do a quick round of overrated or underrated. So I'll just give you like a quick bullet point or item. And you have to say whether it's overrated or underrated. All right, let's do it. The first one is Disney as a first license.

42:22 - Overrated or underrated, five calls

David: I would say overrated because it's almost impossible.

Andrej: What about anime for a Western DTC brand?

David: Oh, definitely underrated. Anime is so hot right now. There's not enough people doing it.

Andrej: What about 80s 80s nostalgia?

David: Oh, underrated. There's a lot of people doing it now, but the proof is in the pudding. It's doing so well, so I'm gonna stay say underrated still.

Andrej: And what about a character in your ads instead of a content creator?

David: Oh, definitely, definitely underrated. It doesn't happen enough. I'm banging on about this all the time about how. Advertisers should be putting characters in advertising more often. It's still so rare to see, so underrated for sure.

Andrej: Nice. Is there a specific license that you'd bet on for 2027?

David: Oh yes. So Bluey has a movie next year launching in August. Bluey is already the number one preschool brand in the world. I think it's the most watched. Show on Disney+ as well, in terms of minutes, and it will have a huge blockbuster moment with its premiere. Earlier this year, I went to a showcase. Actually, I've been to to two or three showcases hosted by BBC Worldwide this year, and every time they showed a snippet of the new film, and it is absolutely incredible. Only a month or so ago, it was actually released to the. The public, the new kind of 3D CGI kind of version of the characters, and now everybody knows what it's about. And I, you know, I had to sign strict non-disclosure agreements. I wasn't allowed to talk about it, but now that it's out there, I can talk about it and just say, like, honestly, I was a bit concerned going from kind of like the 2D traditional bluey, art, in the in the series to this 3D. I feel like some brands really struggle to make that leap. But the moment I saw it, I was like, wow, it's perfect. It looks so incredible. So next year is going to be all about Bluey, and I would say Shrek 5 is going to be massive as well. That's I think around June, so it's going to be a big, another big year for Shrek next year. And then of course, Frozen 3 is in December, so that's going to be the big holiday film of 2027 will be Frozen 3. So it's it's very much kind of like. The greatest hits of licensing, when you're talking about another Frozen, another Shrek, but it's great to see, you know, Bluey getting, her first film as well.

Editor's note: at the time of publishing, Disney has Frozen 3 dated 24 November 2027.

Andrej: Nice, that's exciting. The last one is like, let's say an operator is is listening to that, wants to get into the the licensing game, never did anything before. Like, what is their first action that they should do, like next week, without anything else.

45:29 - The first move for an operator next week

David: I might use this to plug my Learn to License course. You know, I get contacted so often with people, companies of all shapes and sizes, that want to learn about licensing, and they always say, "Oh, I just want a 15-minute call. I just have some questions to ask," and I can't say yes to everybody, or else I wouldn't get any work done of my own. So instead, I created this course, the Learn to License course. And it's six sessions, about 15 to 20 minutes each session, and it's like masterclass, but it's my own version of that. I filmed it in a proper studio. It's got real examples. It's really well done, and within, you know, a couple of hours of of if you dedicate time to do that course, I think at the moment the price is only 99 dollars, so it's really good value. You will learn more. In that course than you would spending time with me because it's everything. It's a very thought through course about what licensing is all about from somebody that's never done licensing before. So I would say that that is absolutely the best resource anybody can have. And if you're thinking about licensing, that should be the first thing that you do next week.

Andrej: And where should people find you?

David: So you can listen to my podcast Born to License. It's on all of The anywhere that you really listen to your podcast, we're also on YouTube, so Born to License on YouTube. I'm pretty big on LinkedIn, so come find me, David Born. Surname is B O R N. I'm also on Instagram, David Born, but instead of an O, it's a zero. And then you can find everything about me on my personal website, including my personal blog, which is thedavidborn.com. So there's lots of places that you can see what I'm up to.

Andrej: David, really appreciate you hopping on. Really enjoyed it.

David: Thanks, Andrej. Appreciate the chat. One thing to take from this. Licensing isn't a shortcut. It's a second engine that you build onto a business that already works. If yours does, there's a version where a fan base someone else spent 75 years building shows up for your product. And you pay for it by the sale, not by the click. Start with a license nobody's fighting over. Not the one on your mood board. If this was useful, follow the show and send it to one person that needs it. See you on the next one.